Why SAR is important to US companies doing business in Mexico

Article Abstract:

The mandatory occupational pension program, Sistema de Ahorro para el Retiro (SAR), implemented in Mexico in Feb 1992 can generate financial benefits for employers as well as their employees and the Mexican economy in general. The program is comprised of a defined contribution program designed to augment social security programs already in place. Although employers will pay for SAR's full cost, which is two percent of covered pay for every employee, it will also save them money being payed to retirees under the termination indemnities ordered by Mexican law. SAR may also induce early retirement due to employees' increase retirement income.

Human resource management, International business enterprises, Multinational corporations, Social policy, Mexico

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Employer pensions and personal savings: conflict or complement?

Article Abstract:

The positive effect pensions have on national savings has been largely ignored, due to the assumption that employees save less, once assured of pension coverage. However, because employer pensions filla major chunk of private savings, a renewed emphasis on them may well result inincreased savings. The life cycle model, which contradicts this, is not entirely reliable either, because of pension funding, overall economic cost andother questions. Also significant are human factors such as employee awareness,concerns and motivations, as well as their knowledge about the structure of contributions and provisions.

Evaluation, Labor relations, Savings

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Public pensions: big investors in stock index funds

Article Abstract:

A study on the participation of public pension funds in common stock index funds is presented. The study shows that public pension funds dominate US financial markets, particularly in equity index funds. Pension investment officers attribute this to low transaction costs, low risks in market performance, automatic diversification and more stable portfolios. However, they complain that indexing also limits performance and the utilization of market inefficiencies. The study also revealed that the size of pension plan assets were proportional to the percent investments in index funds.

Finance, Stock index futures, Civil service pensions

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